During a period of economic depression, such as has existed for a long period in Japan, a profit-oriented bank will act in such a way that
a. dampens the fluctuations.
b. makes the depression worse.
c. is neutral with respect to the fluctuations.
d. is counter-cyclical and stabilizing.
b
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If the MPC in an economy is 0.8, government could close a recessionary expenditure gap of $100 billion by cutting taxes by
A. $100 billion. B. $125 billion. C. $80 billion. D. $200 billion.
Suppose our firm produces chartered business flights with capital (planes) and labor (pilots) in fixed proportion (i.e., one pilot for each plane)
If the wage rate paid to the pilots increases relative to the rental rate of capital for the airplanes, then: A) the optimal capital-labor ratio should increase. B) the optimal capital-labor ratio should decrease. C) the optimal capital-labor ratio remains the same. D) We do not have enough information to answer this question.
Which of the following goods is least likely to be provided by the private sector?
a. a good characterized by nonrivalry in consumption from which nonpaying customers can be excluded b. a good characterized by nonrivalry in consumption from which paying customers cannot be excluded c. a good characterized by rivalry in consumption from which nonpaying customers can be excluded d. a good for which the marginal private benefit to an individual exceeds the marginal cost of producing the good
A price floor keeps a price:
a. from rising above a certain level. b. from decreasing below a certain level. c. at a stabilized point. d. from increasing or decreasing.